TMI Blog2004 (12) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... and to release the properties and fixed assets offered as collateral securities. 3. The writ petitioner is a private limited company registered under the Indian Companies Act and is engaged in the business of Software Development Projects. A term loan of ₹ 2.60 crores was sanctioned to the writ petitioner-company by the TIIC vide sanction letter dated 3 0.04.2001for a Software Development Project. 4. It was alleged in paragraph-11 of the affidavit filed in support of the writ petition that petitioner could not pay the dues to the TIIC as per the time schedule because of the unforeseen constraints in the market, as witnessed everywhere due to the global recession, and because of that the writ petitioner could not earn adequate revenues to repay the loan, since it was in its early phase of consolidation. TIIC issued a foreclosure notice on 16.07.2003 demanding the petitioner to settle the entire amount of principal and interest, failing which it will proceed with the auctioning of the collateral properties. 5. It is alleged that the petitioner came forward to raise funds by disposing of the properties offered as collateral securities, and its Managing Director present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheduling of the loan, or to fix instalments. 8. No doubt Article 226 on its plain language states that a writ can be used by the High Court for enforcing a fundamental right or for 'any other purpose'. However, by judicial interpretation the words ' any other purpose' have been interpreted to mean the enforcement of any legal right or performance of any legal duty, vide Calcutta Gas Co. Vs. State of West Bengal, AIR 1962 SC 1044. In the present case, the writ petitioner has really prayed for a mandamus to the Corporation to grant it a one time settlement, but no violation of any law has been pointed out. In our opinion, no such mandamus can be issued in this case, and hence the writ petition should not have been entertained. A mandamus is issued only when the petitioner can show that he has a legal right to the performance of a public duty by the party against whom the mandamus is sought 9. In Bihar Eastern Gangetic Fishermen Co-operative Society Ltd., Vs. Sipahi Singh, AIR 1977 SC 2149 (vide para -15) the Supreme Court observed: There is abundant authority in favour of the proposition that a writ of mandamus can be granted only in a case where there is a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d therein. The UPFC is not acting contrary to the terms of the contract which has been entered into between the parties. What the petitioners want now is that their proposal for one time settlement which contains terms advantageous to them, specially a rate of interest lesser than what they had agreed upon at the time of entering into the contract and disbursement of the loan, be accepted. The State Financial Corporations Act, which governs the working of the UPFC, does not contain any provision for entering into a one time settlement. A Court cannot issue any direction to a party to enter into a compromise or settlement. By the very nature of things a settlement involves consent and it is a voluntary act of the party. In a matter where a creditor is enforcing its liability upon the debtor, the debtor has no legal right to claim that the claim be settled on favourable terms proposed by him whereby the claim of the creditor is reduced. Therefore, in our opinion, the prayer made by the petitioners that this Court should issue a writ of mandamus to the respondents to accept the proposal of one time settlement made by them cannot be granted as it does not come within the principles on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties. This will require an inspection of the spot, the assessment of the valuation of the land, building and machinery and a host of other factors. It is well-nigh impossible for the Courts to enter into such kind of exercise in proceedings under Article 226 of the Constitution. It is also noteworthy that if a prayer is entertained on the part of a defaulting unit to compel or direct the Corporation to enter into one time settlement on the terms proposed by it, then a profit making industrial concern which is capable of paying its dues as per the terms of the agreement entered into by it, would also like to get a one time settlement in his favour. Who would not like to get his liability reduced and pay less than what he is liable to pay under the contract executed by him? 11. In the present case no error of law or violation of law has been pointed out by the writ petitioner. As observed by a Division Bench of this Court in Rama Muthuramalingam Vs. Deputy Superintendent of Police, Tiruvarur District Others (2004 (5) CTC 554) the Court should exercise judicial restraint and not interfere with the matters which do not pertain to its proper domain. 12. In Haryana Finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Others Vs. Contromix Pvt. Ltd., and another ((1995) 4 SCC 595). That decision was passed relying upon the decision in Mahesh Chandra's Case (supra), which has been set aside by a larger Bench of the Supreme Court in Haryana Financial Corporation Case (supra). Hence, that decision can be of no help to the 1st respondent-Company. 15. In M/s.M.M.Accessories Vs. M/s.U.P.Financial Corporation, 2002 (46) Allahabad Law Reporter 261 it has been held by the Allahabad High Court (per G.P.Mathur, J.) that there is no right vested with anyone to get a direction from the court for one time settlement. It is only the Corporation or the financial institution which granted the loan which can grant one time settlement, if it so chooses, but the Court cannot compel it to do so. 16. A loan is granted in terms of the contract, and grant of one time settlement or re-scheduling of the loan amount is really a modification of the contract, which can only be done by mutual consent of the parties, vide Section 62 of the Contract Act, 1872. The Court cannot alter the terms of the contract. 17. For the reasons stated above, this writ appeal is allowed and the impugned order passed in W.P.No.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
